Driving home the point made in March 2024's "In Nvidia's World, If You (and your company) Don't Have Money You Will Not Be Able To Compete (NVDA)".
From SemiAnalysis, July 11:
Meta’s shocking purchase of 49% of Scale AI at a ~$30B valuation shows that money is of no concern for the $100B annual cashflow ad machine. Despite seemingly unlimited resources, Meta has been falling behind foundation labs in model performance.
The real wake-up call came when Meta lost its lead in open-weight models to DeepSeek. That stirred the sleeping giant. Now in full Founder Mode, Mark Zuckerberg is personally leading Meta’s charge, identifying Meta’s two core shortcomings: Talent and Compute. As one of the last founders still running a tech behemoth, Mark doesn’t need SemiAnalysis to tell him to slow down stock buybacks to fund the future!
In addition to throwing money at the problem, he’s fundamentally rethinking Meta’s approach to GenAI. He’s starting a new “Superintelligence” team from scratch and personally poaching top AI talent with pay that makes top athlete pay look like chump change. The typical offer for the folks being poached for this team is $200 million over 4 years. That is 100x that of their peers. Furthermore, there have been some billion dollar offers that were not accepted by researcher/engineering leadership at OpenAI. While these offers aren’t all successful, Zuck is crushing the competitors by drastically increasing their cost per employee.
Perhaps even more iconic, Zuck threw his entire Datacenter playbook into the trash and is now building multi-billion-dollar GPU clusters in “Tents”!
Source: SemiAnalysis Datacenter Model – as of 07/06/2025
As this report details, nothing is off the table. We unpack Meta’s unprecedented reinvention from Compute to Talent in the pursuit of Superintelligence as well as the story of how we got here. From Llama 3.0 open-sourced dominance to the epic fail of Llama 4 Behemoth, this Titan of AI is down but not out. In fact, we believe Meta’s ramp in training FLOPS will rival even that of OAI. The company is going from GPU-poor to GPU-filthy-rich on a per researcher basis....
....MUCH MORE
Most recently on Zuckerberg, June 30 - "Meta shares hit all-time high as Mark Zuckerberg goes on AI hiring blitz" (META).
And more generally, I realize I risk embodying the definition of a fanatic lifted by Churchill:
"A fanatic is one who can’t change his mind and won’t change the subject."
but the concept is crucial to understanding and investing in the current reality.
If interested our latest iteration was July 8's "The 'new normal' of growth stock dominance":
What our five years of blather regarding advantage flywheels is all about.*
